The Political Disaster That Is California - David Friedberg
In a Nutshell
California's prosperity is collapsing due to unsustainable spending on failed programs like the $30B bullet train fiasco, $220M homeless initiative housing just six people, and a $600B-$1T public pension shortfall, driving an exodus of tech leaders (87% planning to leave). The new billionaire wealth tax—1% annually on net worth over $1B—sets a dangerous precedent for eroding private property rights, potentially expanding to millionaires and beyond via annual asset assessments, mirroring historical income tax creep from 1% to 53%. This risks socialism where 51% vote to seize from 49%, threatening U.S. innovation amid global AI competition from China, favoring dystopian control over optimistic abundance.
These notes were generated by AI and may contain inaccuracies.
California's core engine of prosperity since the 1800s is unraveling. A third of people in group chats have already left. An informal survey of core tech leaders showed 87% plan to leave. Emerging tech CEOs of growing startups are looking to leave; one company planning to move from Southern to Northern California is now moving to Nevada due to worries about what's next. California is in a fundamental sinkhole.
Politicians promise things people don't have to get elected; no politician in the last 100 years has been elected by saying they'll take things away or do less.
California created the highest tax rate in the country from Silicon Valley success, income, and capital gains to fund nonsense like the bullet train to nowhere ($30 billion spent, six CEOs fired or one arrested). A homeless program spent $220 million to get six homeless people out of poverty. Rural broadband spent the same amount as could have given every American citizen Starlink.
Public pensions for public employees have guarantees over the past 12-15 years that the state cannot afford, with an estimated $600 billion to $1 trillion shortfall. Unfunded promises include healthcare for union workers. This creates massive liability problems, leading to chaos with people leaving.
The billionaire tax from SEIU union taxes 5% of net worth over $1 billion, giving the legislature ability to change thresholds and amounts in the future (e.g., 1% on billionaires every year).
Original income tax in 1930 was 1% (on incomes over $3,000 a year). It expanded: wartime tax to fund wars, highway system; post-WWII top rate hit 94% in 1944-1945, setting precedent for FDR New Deal expansionism. Started as temporary wartime tax when government was small, funded by tariffs. Today, California income tax reaches 53% for speaker.
This leads to government solving problems, escalating every year without going down. Risk of 51% voting to take from 49%.
Billionaire tax act introduces first U.S. wealth tax on post-tax earnings and private property (e.g., taxing backyard iron ore, podcast studio). Gives government right to assess all assets annually (bank accounts, stocks, cars, art), eroding private property rights.
Precedent: from 1% on billionaires to 5% or 2% on millionaires, then 3% on $100k net worth. Leads to socialism where 51% take everything from 49%.
The United States was set up to escape tyrannical governments that took everything and controlled people, to have private property rights. Sure, pay 53% income tax for services, but then leave me alone.
National politicians like Bernie Sanders, Ro Khanna, AOC, Elizabeth Warren push national wealth tax. Between 2026-2028, targeting elites (billionaires, tech people) via wealth tax removes private property rights, questioning U.S. future.
Juxtaposed with optimism: free energy, living forever, abundance, resources, happiness, less work, robots. Everything getting better, yet risking self-destruction.
Choice between optimistic abundance path or pessimistic control/dystopia. AI is most unfavorable in U.S. polls (more than Donald Trump). Counterbalancing force: China will take benefits if U.S. walks wrong path.
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